Merz Proposes Special Bundestag Session for New Debt Management

In a significant development within the CDU leadership, Friedrich Merz, the victorious candidate from the party, has indicated plans for a potential special session of the Bundestag. Sources reveal that Merz is eyeing Monday, March 10, as a suitable date for this session, although other options are also being considered.

The context of this proposed session revolves around ongoing discussions regarding amendments to the debt brake or the establishment of new special funds. During the CDU board meeting, Merz emphasized the need for new special funds without pursuing a reform of the existing debt brake.

This announcement comes amid heightened anticipation for the next round of exploratory talks between the CDU and SPD regarding fiscal matters. The previously scheduled break for Carnival has been canceled due to the urgency of these discussions. Key topics on the table include substantial financial packages that the coalition partners may consider to borrow from capital markets to cover essential expenditures in defense, particularly for military enhancement and aid to Ukraine, as well as infrastructure improvements.

Leading economists estimate that the Bundeswehr may require as much as EUR400 billion, while infrastructure needs could reach up to EUR500 billion. These figures are part of the discussions currently underway in the exploratory negotiations. The funds for these initiatives might be secured through two new special funds, which are essentially a means of incurring debt. If these are to be approved without the support of the AfD and Linke parties, they must be passed by the outgoing Bundestag before the end of March, as the new assembly will not have the necessary two-thirds majority without these parties.

Concerns have been raised about the absence of prior discussion regarding these new debt proposals during Merz's election campaign. The CDU board and the presidency convened earlier today, with Merz set to address the media later in the afternoon.

Alternative strategies have also been proposed, including increasing the existing special fund established in response to the Ukraine crisis and potentially creating an additional fund specifically for infrastructure projects. Another discussed option was a fundamental reform of the debt brake, which would exempt defense spending from its restrictions. However, the feasibility of implementing such complex changes on short notice remains uncertain.

The revelation of Merz's plans has drawn criticism from the SPD, highlighting a lack of confidentiality in the discussions. Following a report on the CDU's plans, SPD leaders Lars Klingbeil and Saskia Esken were confronted by the press, with Esken expressing dissatisfaction over the premature disclosure of internal conversations.

Esken underscored that the publication of Merz's proposals had not been coordinated with the SPD, suggesting a breach of trust in the negotiation process. Although they refrained from commenting on the specifics of Merz's proposal, both leaders affirmed the importance of maintaining confidentiality in the discussions.

It has been suggested that a preliminary decision could emerge from an upcoming special financing meeting involving representatives from both parties. Notable figures from the CDU, including Michael Kretschmer, Jens Spahn, and Thorsten Frei, are expected to participate in these talks.

Merz stated after the CDU board meeting that a final decision regarding the special session remains pending, emphasizing the constructive nature of ongoing discussions with the SPD.

The urgency of these negotiations is underscored by recent geopolitical developments, notably the implications of U.S. President Donald Trump's comments regarding support for Ukraine. Some members of the CDU are advocating for immediate financial measures rather than waiting for the new Bundestag to convene, which could take several weeks--a timeframe that many argue is untenable given the pressing needs of Ukraine and the broader global context.

In light of these discussions, it appears that the SPD is broadly supportive of the proposals being put forth, reflecting a cooperative approach to addressing the financial challenges ahead.